Becoming a Unicorn 🦄

Flutterwave becoming a Unicorn, Meet Teju Ajani, YouTube's Taxes

Hello there, 

Phew! This time last year, the pandemic had just started and over the course of the year, we’ve had to wear masks and wash our hands as our lives depend on it. Actually, it does.

Flutterwave becomes a Unicorn

You’ve probably heard this already, it was arguably the biggest story of this week.

Earlier this week, Flutterwave, an African fintech company announced that it raised $170 million, valuing the company at over $1 billion.

The news = Unicorn status. The buzz was centred around Flutterwave’s valuation.  A unicorn is any private startup company that is valued at more than $1 billion.  It’s important to note that being a unicorn does not mean that a startup has $1 billion in revenue; it simply means that for the purposes of investments, venture capitalists and private equity firms value them at that amount. 

What’s so special about this number?

Being worth $1 billion is the magic number because it suggests that a company has disrupted the market or created a new market. 

What else is special about it?

Hitting the $1 billion valuation means Flutterwave is the third unicorn coming out of Nigeria after fellow fintech Interswitch and e-commerce company, Jumia. What’s impressive about this milestone is how quickly Flutterwave has joined the small club of African unicorns – under 10 years.  

This news also boosts the confidence of investors as it shows that investing in African companies can yield high returns.

What’s next Flutterwave?

Launching new products, expanding to other markets like North Africa and possibly acquiring smaller players.

Meet Teju Ajani

Continuing our series of profiling African women, this week, our focus is on Teju Ajani, who earlier this week became the first-ever country director for Apple in Nigeria.

About Teju

Before joining Google, She was at Google. Teju Ajani worked as Business Development Manager in Nigeria and led content partnerships in Sub Saharan Africa at YouTube, London between 2014 and 2018.

She is an alumnus of the University of Ilorin, Nigeria and Golden Gate University, San Francisco where she earned a BSc in Economics and MSc in Software Engineering respectively.

Ajani is a strong advocate for women in leadership and is passionate about technology and its potential as an economic equalizer to open up opportunities for women. 

Why this matters: Apple’s products are one of the most used devices in the world, but it’s still lagging behind in Africa. Last month, Apple devices accounted for 16% of the mobile operating system space in Africa, when compared to Android which had 81.1%. 

Also, Africa has no official Apple office, only reseller stores in South Africa.  Teju Ajani’s appointment means Apple is about to up its game in Africa.

Taxing the Internet

Picture this; you get hungry and decide to cook. Food is ready but you choose to close your eyes and  pray over the food first.  You open your eyes....bam! Some of your food is gone!

If you can imagine that feeling, then you know how YouTube creators outside the US are feeling right now.

Let's hear the juice

YouTube, one of the largest content creation platforms in the world with 2 billion users, says it will start taxing content creators based outside the US. A report last year showed that creators on YouTube may have earned about $8.5 billion last year. Basically, creators make money when businesses advertise along with their videos, Google takes 45% of the what the advertisers pays while the creator take 55%

From June 2021, YouTube  will force all content creators around the world to pay taxes for revenue generated from viewers in the US. 

In a support page, YouTube said that Google has the responsibility under Chapter 3 of the US Internal Revenue Code to collect tax information, withhold taxes, and report to the Internal Revenue Service when a creator earned royalty revenue from viewers in the US.  And that’s why they decided to take it serious

The numbers

When a creator provides their tax information, tax will be between 0–30% on the earnings they generate from viewers which varies depending on the condition that the country of the creator has a tax treaty relationship with the US. In India, the withholding rate is set at 15% of the total earnings a creator gets from viewers in the  US. 

This rule doesn't apply to US-based YouTubers since they already pay local taxes. YouTube claims it will measure Ad Revenues, Super Chats, Super Stickers, and Channel Memberships to determine tax rate.

A pattern…

Some months back, we discussed the digital tax that was implemented in Kenya and we think that this is kinda similar.  Are we gonna see more ‘digital politics’ in the future?  

We try to think about the successful content creators who rely on Ad revenue and sponsorships from their videos as their source of income. Especially in emerging markets like Africa and India.

A good side to look at is that it only applies to US viewers. The new rule does not cover creators that make videos for viewers in their local markets. 

You can peep this Twitter thread for more info.

Worth reading 📚

Quote 💭

There comes a point where we need to stop just pulling people out of the river. We need to go upstream and find out why they’re falling in.

– Desmond Tutu